Change Maryland argues for change at state's economic development agency

A group formed by a Maryland businessman argued in a report released Monday that the state's Department of Business and Economic Development is a political marketing organization rather than the job-creation agency it should be.

The department needs to reorganize to attract more jobs to the state, and must better measure its performance and increase transparency, the Change Maryland report says. The group was founded by Larry Hogan, who heads an Annapolis real estate brokerage, worked as appointments secretary for Gov. Robert L. Ehrlich Jr. and contemplated a run against Gov. Martin O'Malley in 2010.


A spokeswoman for the economic development department defended its record, saying that all of its programs are focused on job creation and retention.

Among the report's criticisms:


• The agency ought to be a credible source of information about the state's business climate but instead promotes studies that make Maryland look good while ignoring the ones — such as those focused on taxes and regulation — in which the state's ranking is middling to poor

The department's 15-employee Office of Business Development, which recruits businesses, has just under half as many people as its 32-employee Division of Marketing and Communications

The agency doesn't disclose enough information about what, if anything, it is doing on initiatives launched with fanfare, such as the "Maryland Made Easy" effort aimed at simplifying the regulatory environment

Change Maryland contends that the agency, known as DBED, is focused mainly on making the state's governor look good, regardless of who is in office. Hogan, who calls his organization nonpartisan, said in a statement that the issue isn't about Democrats versus Republicans but about making Maryland "a leader in economic development and attracting jobs."

But Karen Glenn Hood, a DBED spokeswoman, called the report "an opinion of a political organization that really doesn't have their facts straight."

She said the Office of Business Development is only one part of the larger Division of Business and Enterprise Development, which has more than 50 employees and focuses on a range of business recruitment and retention efforts.

The marketing and communications division also sees its role as helping with job creation by getting the word out about programs to help businesses, she added.

What Hood described as a "huge" Maryland Made Easy change should launch early next year, allowing people to register their new businesses online rather than in person at the state Department of Assessments and Taxation.

Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute, said his experience in other states suggests that DBED is no more political than the typical economic development agency. He said Maryland could use a better relationship between businesses and political leaders, but the lack "has many people to blame."

"I don't think DBED is a barrier to economic development," said Clinch, who — like other economists in town — has produced studies for the agency in the past. "I think it does the best it can do with the limited budget it's been given."

Anirban Basu, head of Sage Policy Group, a Baltimore economic and policy consulting firm, has worked for DBED, too, and said he thinks highly of the people there. But he doesn't disagree with Change Maryland's main contention.

"I think that DBED in fact could play a more aggressive role in job creation," Basu said. "It needs to recognize the weaknesses of [the] state's economic climate and address those weaknesses, both in front of and behind the scenes."


The need will increase as the federal government reins in its super-sized budget deficit, he said. Federal spending powers a large part of the state's economy.

"My feeling is, we're not that serious about economic development because we haven't had to have been," Basu said. "So much has come to us under the auspices of the federal government, and it's almost been too easy for us. But I can tell you, in Pennsylvania and West Virginia, they're really serious about economic development … and there will be a time in our future when we'll have to be serious too."


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